Verizon: Multicast Is 'a Year Away'

Verizon says that it is ready to deliver LTE Multicast and is simply waiting for the compatible devices to become available in volume. Verizon is also working on the revenue models for the 4G video service.

"I think [the 4G Mobile TV service] will be a year away," said Verizon Wireless CFO Fran Shammo on the operator's third-quarter earnings call Tuesday morning. Verizon first demonstrated the video capability in New York City around the Super Bowl with the NFL. He expects that devices need to arrive and content providers to see potential customers before the mobile TV service takes off. (See Verizon's Multicast LTE Video to Arrive in 2015.)

"The network was ready in August of this past year," said Shammo. "The chipsets are now being implemented in most of the devices that are coming out in the fourth quarter. Some phones in the third quarter had the chipset."

Having plenty of compatible devices on the market is necessary to seed the marketplace, the CFO explained. "It's going to take us about a year before the chipsets ramp and we have some volume there which gets the attention of content providers," Shammo said, adding that content providers are "already excited." (See Verizon Beefing Up Network for VoLTE, Multicast Video.)

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LTE Broadcast is based on the eMBMS (evolved Multimedia Broadcast Multicast Services) standard. Sixteen operators around the globe are now testing the services, often known as LTE Multicast or LTE Broadcast. The technology may not be the biggest issue for operators looking to deploy the video service. (See eMBMS: Revolutionary Technology or Alphabet Soup?.)

The big question around Multicast for Shammo is how Verizon and its content partners make money from the service. It could be advertising, it could be a consumer pay model or a revenue share model. "We're not sure yet how the ecosystem will play itself out," says Shammo.

The Nielsen Co. is expected to start counting mobile TV viewers in the fourth quarter, so this will help, according to Shammo. (See Nielsen: Multiscreen Viewing Taking Off.)

This just one of the avenues beyond smartphones and tablets that Verizon hopes to derive revenue from in the future. Shammo identified over-the-top (OTT) services, like LTE Multicast, and M2M as big prospects for the operator.

For the third quarter, Verizon's earnings were relatively flat. Revenue in the quarter rose 4.3%, year-on-year, to $31.6 billion.

"This is not necessarily about how many connections I put on the network. This is about how many of those connections actually pay revenue," says Shammo. Adding that avenues around Internet of Things, healthcare, energy and fleet management are all opening up for the carrier.

Verizon reported revenues up 4% year-on-year for the quarter at $31.6 billion. It narrowly missed Wall Street's EPS expectation of $0.90, however, with earnings per share of $0.89.

Verizon Wireless brought in 1.53 million new mobile customers during the quarter. It added 457,000 phones and 1.1 million tablets on "postpaid" monthly contracts. Its subscriber base is now just over 106 million.

Verizon's wireless revenues were $21.8 billion in the third quarter, up 7% compared to the previous year. The company didn't reveal any sales figures for the new Apple Inc. (Nasdaq: AAPL) iPhone 6 models, which was launched in September. (See Apple Claims Record iPhone 6 Pre-Sales.)

— Dan Jones, Mobile Editor, Light Reading

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